CEO Group Backs SEC After Judge Rejects Citi Settlement

The Business Roundtable is supporting the Securities and Exchange Commission after Southern District Judge Jed Rakoff rejected the SEC’s proposed $285 million settlement with Citigroup. The association, made up of CEOs of some of the nation’s largest businesses, filed a proposed amicus brief on Jan. 12 supporting the SEC at the U.S. Court of Appeals for the Second Circuit. In the six-page brief, the Business Roundtable’s counsel, Mark Perry of Gibson, Dunn & Crutcher, called Judge Rakoff’s ruling a “novel, and potentially dangerous, approach to reviewing settlement agreements.”

Judge Rakoff rejected the proposed settlement last November, calling the SEC’s policy of allowing defendants to settle without admitting or denying wrongdoing “hallowed by history, but not by reason.” The $285 million deal would have allowed Citi to duck the question of culpability while resolving claims that it duped investors in a $1 billion collateralized debt obligation. The proposed settlement, the judge concluded, was “neither fair, nor reasonable, nor adequate, nor in the public interest.”